HALLOWELL — An expected budget reading Monday has been postponed, but a councilor said a special meeting will keep readings on schedule to finish in July.

City Manager Nate Rudy said Thursday the budget reading will not be on Monday’s City Council meeting agenda due to “concerns” from members of the council’s Finance Committee. The latest draft, which has yet to be approved, shows an 11.2% jump in revenue, but a 15.13% jump in spending.

“I have requested specific questions in email from councilors so that we can understand any remaining concerns and respond to them accordingly,” Rudy said. “There seems to be some remaining lack of clarity, which we would like to resolve as soon as possible so that we can proceed with a second reading.”

Finance Committee Chair George Lapointe said the committee is trying to bring city revenues closer to expenditures and determine whether or not to capture the full value within the city’s tax increment financing district. The city has not been capturing the full value of the district, which would have sheltered more money for downtown projects instead of adding money to the city’s general fund through property taxes.

City staff recommended capturing the current value because it increases the city’s property tax rate by directing money away from the city’s general fund and into a TIF account for downtown projects. Councilor Maureen Aucoin, who pointed out errors with the city’s TIF in April, supported capturing the full value and using TIF funds to cover some cost that would normally be covered by the general fund.

The second reading of the budget may also show a major increase in revenue from the first reading, which showed an initial 17.6% decrease. A budget draft circulated by Rudy May 30 said municipal revenues in the second reading will be $877,791, an increase of $88,896 — or 11.2% — from the current fiscal year’s, excluding property tax revenue and carryover funds. The draft budget shows an  increase in excise tax revenues and state revenue sharing, and other small increases.

Fiscal year 2020’s draft budget does not show any carried-over funding from the current fiscal year, which used $225,000. The draft shows a total of $6,544,292 in revenue, including an estimated figure for property taxes.

Rudy’s May 30 draft also shows a bump in spending from the first reading’s $6,647,016 in total spending, an increase of $873,727 — or 2.3%. That also represents an increase of 15.13% from the current fiscal year’s budget.

That hike is driven by a $365,400 in capital improvements, including $67,000 to replace rotten decking at the Granite City Park bulkhead, $43,000 for a new police cruiser and $80,000 for the first year of a seven-year, $500,000 lease for two new fire trucks, and other increases.

This draft shows a $3,062,505 payment to Regional School Unit 2 and $226,560 in county taxes, leaving $3,357,951 for municipal spending

The budget could still see cuts before the third reading.

At a May 30 Finance Committee meeting, Rudy circulated two documents that showed $120,650 in potential “TIF fund allocations” and $627,024 in “spending items for discussion.” Some items up for discussion include the aforementioned capital expenditures, along with $7,300 for new computers for the Public Works Department and $13,000 for a Jaws of Life extrication tool.

Another discussion item is an updated $60,000 allocation to the Hubbard Free Library. Back in April, the library asked for $74,000 from the city in fiscal year 2020 while it was staring down a $12,000 shortfall in the current fiscal year. Library Trustees President Ken Young said some “creative thinking” the shortfall is projected to be as low as $2,500 at the end of the year.

“We’ll postpone some of our costs into next year,” Young said.

Last year, the city increased its contribution to the library, awarding the library $57,000; $15,000 for operating costs, its usual $27,000 annual contribution and $15,000 in tax increment financing revenue to fund the strategic plan and other small projects. Young said this year’s strategic planning revealed that Hallowell residents wanted more from the library, but Young said the library would have to shrink programming or hours to cut cost if there is a budget shortfall.

“People want more Hubbard; they want more books, they want more hours, they want more programs,” he said, “With no new city money, that’s not going to be possible.”

Young said donations are also down, despite mailing letters to 1,200 potential donors this fiscal year, compared to reaching out to only 238 potential donors last year. Last year, the library raised $33,800 from 250 donors. This year, the library has raised $30,700 from about 220 donors. He said a reduction in donors could be for a number of reasons, but misinformation about how the library operates and its relationship to the city could play a part. Young said the city’s annual contribution makes up about 40% library’s total operating funds, but the remaining portion comes from donations, money from the non-profit’s endowment and other revenues.

“Many of the people said the city could contribute more (or) the city should take over the library,” he said. “Some people think the city does more than it does or it should do more.”

This year, Young said the library budget is rising to $105,602 from last year’s $99,671. He contributed the bump to a scheduled increase in the minimum wage from $11 per hour to $12 per hour on January 1, 2020.

Lapointe said a special meeting would likely be held later in June to hold the second reading, keeping the budget on schedule to be completed with a third reading at July’s regular City Council meeting. According to Rudy’s May 30 memo, the first reading is the “department leads” recommendation, the second is the City Manager’s recommendation and the third is the finance committee’s recommendation.

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